Cision, Vocus & Meltwater Oh My!

— It was resolved that the board of directors shall consist of five directors, with no deputy directors;

— In light of the short period in time between the extraordinary general meeting and the annual general meeting 2014, where a resolution regarding remuneration to the directors of the board will be passed, it was resolved that no remuneration be paid for the interim period between the shareholders’ meetings. The resolution regarding remuneration to the directors of the board shall be passed at the annual general meeting; and

— Lawrence C. Fey (GTCR), Mark M. Anderson (GTCR), Cedric Bradfer, Peter Lundin and Ronan Carroll were elected as directors of the board for the time until the end of the next annual shareholders’ meeting. Lawrence C. Fey was elected as chairman of the board.

UPDATE April 25, 2014: Blue Canyon Holdings owns 71.9 per cent of the shares and votes in Cision at the end of the acceptance period of April 22nd. An extraordinary general meeting has been requested by Blue Canyon Holdings on May 20th to elect a new board of directors.

The chances of shareholders accepting Meltwater’s bid a this point is only kept alive by the fact that it is a slightly higher bid, however I don’t see that happening with Blue Canyon Holding now sporting such a strong position. The acceptance period for Meltwater’s bid ends May 27th. However all the decisions will have been made at the meeting on May 20th, so mark your calendar.

UPDATE April 16, 2014: Cision’s shares are responding well to the persistent bidding by Meltwater climbing 1.6 percent . The Meltwater offer is now up to $142.93M but is conditional upon reaching a 70 percent ownership which means the chances of winning against GTCR is remote. “Satisfaction of this condition requires that GTCR either accepts the Meltwater offer or enables the shareholders who have previously accepted the GTCR offer to withdraw their acceptances and accept the Meltwater offer,” Meltwater said.

We should see the end of this around April 22nd. Blue Canyon Holdings continues to hold a solid position with their unconditional accepted offer. In the mean time data vendors related to this space being acquired – read about it here.

UPDATE April 7, 2014: SOLD! or rather Acquired! Reuters reports Vocus will be bought by GTCR for $446.5M. The deal is expected to close in Q2.

UPDATE April 5, 2014: On April 3rd, Blue Canyon Holdings published a press release which noted “shareholders representing in aggregate 10.04 per cent of the shares and votes in Cision have accepted the Offer. As previously communicated, Blue Canyon Holdings has in addition thereto, through acquisitions on NASDAQ OMX Stockholm, acquired shares in Cision representing in aggregate 10.06 per cent of the shares and votes in Cision. Together with the Cision shares tendered in the Offer, these shares represent in aggregate 20.1 per cent of the shares and votes in Cision.

…Fairford Holdings Finance AB, Cyril Acquisition AB, Lannebo Fonder and Accendo Capital SICAV-SIF, representing in aggregate 43.3 per cent of the shares and votes in Cision, have undertaken to accept the Offer… As Blue Canyon Holdings has declared the Offer unconditional… As the Offer is unconditional, shareholders do not have the right to withdraw given acceptances.”

So there we have it. According the the Offer by Blue Canyon and the total shares which have already accepted the offer, 63.4 per cent of the shares have made it known Meltwater will not be acquiring Cision.

UPDATEApril 3, 2014: It’s official Meltwater published a press release which notes their offer is now SEK60 in cash per share for Cision. This brings their offer to SEK895M. With the Blue Canyon offer of SEK55.10 per share expiring on April 4th, Meltwater is well positioned to come out on top. Unless Blue Canyon changes their offer to over SEK65 the Meltwater Cision union will move forward.

UPDATEMarch 31, 2014: Meltwater now owns 15.3% of capital and votes in Cision AB following the acquisition of 768,702 shares at SEK60 per share. This raises Meltwater’s stake by 5.2%. This move further demonstrates the powerful interest in the pursuit of Cision’s future. It would not be surprising if Meltwater raises their current offer from SEK55 cash per share to over SEK60.

The first quarter of 2014 has proven to be a real keep on your toes situation with regard to the PR landscape. Several big names are on the selling block:

January – Gorkana, Precise – The original FT.com story is behind the paywall. The article notes that the backers for each will be seeking a sale in the coming months.

February – Cision – Blue Canyon Holdings AB makes a cash offer to the shareholders. In March this is followed by Meltwater making their own bid.

March – Vocus – With a reported market cap of over $235.3M Vocus is said to be working with Stifel Financial Corp to find a suitable buyer.

In a post earlier this year I talked about Gorkana & Precicse going on the market, where I speculated about putting the two together. Many of my counterparts said they thought of that too and how nice it really would be for the customer if done right. Alas I don’t see any movement there but one can hope.

Looking from the outside in Cision has been struggling in the last year couple of years. Once the undisputed market leader for contact database and monitoring for public relations, the market share has steadily eroded. Why else would the prices be dropped so low without even having to ask for a discount or deal when working with a sales representative? Direct and indirect experiences bear this out, especially if there is another vendor being considered. You get the sense that sales have been told to get the deal no matter what the margin loss turns out to be. One only has to look at the numbers from a global perspective to see how Cision stacks up to the competition for market share.

The business mix at Cision is almost evenly split between Media Monitoring and Contact Management with Measurement, PR Distribution and Social Media take a serious back seat.

In the recent past Cision has tried to shift more focus on Content Marketing (the latest buzzword for Marketing which involves the creation and sharing of published content to acquire customers.), however the company isn’t viewed as a Marketing partner and is relying on the Public Relations contacts to move them in front of the folks with the money in Marketing.

Blue Canyon Holdings has put forth a cash offer to the shareholders of Cision back in February for SEK52 and increased that offer in March to SEK 55.10 cash per share. The later was in response to Meltwater throwing their hat into the ring with an offer of at least SEK55. Meltwater disclosed on March 20th that it has acquired more than 1.5M shares of Cision equivalent to a 10.1% stake in the company.

That Cision is going to go through an acquisition is not the question. The big question will be what will Cision look like on the other side. If Blue Canyon Holdings wins out then I don’t expect much of change in the day-to-day offerings of the company. If Meltwater wins out then there will be a big shift in the competitive landscape for PR and a minor one for Marketing.

In PR Meltwater has a 50/50 reputation as some customers love the inexpensive nature of the offering because it hits their needs. For enterprise organizations however Meltwater can fall short depending on the business needs and Cision would fill that slot nicely. It would also get Meltwater into the Content Marketing space as described above. Depending on how Meltwater integrates the offerings of both companies there wouldn’t be a deal they couldn’t win. This is where customer service and minor feature differentiation will dictate who wins an new client when up against a competitor. The question will be who is left? That would be Vocus who is also on the selling block.

On the other hand Vocus put all it’s chips into the Marketing suite over a year ago and re-branded themselves as a company “providing cloud-based marketing and public relations software…”. Don’t let the word cloud blurry the picture all that means is the company is following the same marketing as everyone else. Cloud = Cool. Vocus has been a SaaS company for over 15 years and has been using cloud services for nearly as long.

The business mix at Vocus is nearly 50% Contact Management due to the move to the Marketing space in 2012 with the purchase of iContact. This is followed by Monitoring (News on Demand) and PR Distribution (PR Web acquired in 2006) which are dead even with Measurement and Social Media bringing up the rear.

There is no word publicly on who might be interested in purchasing Vocus just yet. But let’s think about this, when Vocus has been approached in the past they gave anyone courting them The Heisman. Now they are open and there is no blue ocean in the space. So it will come down to an investment firm who are not looking for huge returns but see the Content Marketing vision the company has based the long-term strategic road map upon.

Possibly a direct competitor? NASDAQ (nope, they have MyMediaInfo), PRNewswire (nope, they have everything but the Content Marketing piece already), Marketo (Nope, they are all Marketing which is where the budgets live), SalesForce.com (maybe, if they want a PR solution. It would round out the Radian6 offering and Vocus already has a SF integration!).

Possibly a non-direct competitor? Adobe (nope, they just expanded their own marketing cloud with predictive tools and iBeacon support), NewsCred (nope, they are doing just fine in the content marketing space on their own thank you very much)

Last Words: When you look at the three major integrated public relations tools side by side the numbers show Meltwater is growing a very respectable pace by comparison to the two long-time industry leaders.

The three major integrated Public Relations tools as of YE 2013

Public Relations is not going away. It’s just getting absorbed on some level into the Marketing. For years Cision and Vocus have traded customers. There is no more blue ocean in this space. Innovation will have to come in the form of multifaceted solutions. Meltwater has positioned itself as major market player in PR but has no presence in Content Marketing; and really at this point unless Meltwater can trim down the behemoth that is Cision what they would be buying are customers and brand recognition. However, now Cision and Vocus have an element of uncertainty until the selling is finalized and the dust settles.

What I know for sure is this. A solution or suite of solutions that offers an integrated response to public relations and marketing business needs with an eye towards allowing major third party plug-ins is what will have long-term staying power and profit. Acquisitions are going to continue across the board not just with these competitors but with others not evaluated here. The market continues to consolidate but the important aspect of that is how well those acquisitions are integrated into the company and meet market demand. The answers are with the customer. Whoever is going out there and asking, evaluating and providing solutions to the market problem will come out on top.

What will April, May and June bring? I’m staying tuned because whatever the changes the landscape is going to look completely different than it does today.